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tv   Mad Money  CNBC  October 8, 2013 6:00pm-7:01pm EDT

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>> karen? >> yes, i'm going to sell some out of the money puts against some puts that are at the money. >> these defensive type names, proctor and gamble had a nice game. see that? arm and hammer. >> all right. >> hammer. >> i'm melissa lee, thanks for watching. stay tuned, "mad money's" up right now. the "lightning round" is sponsored by td ameritrade. coming up -- looking for a way to play what's next in tech? cramer's got his eyes locked on the company powering google glass. it's already displayed a stunning performance. quadrupling this year alone. but, could technical signals point to more. call me at 1-800-743-cnbc. how did this market come unglued so quickly? what happened today? before we panic, let's get a little perspective about the session, dow sank 160 points, nasdaq .2%.
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first, even after this two-day, market's not down much at all. the s&p 500's only off about 4%, dow's off 5.7%, nasdaq which totally red hot going into this week is down 3.t2%. barely down at all especially when you consider this high index is up 22% for the year. that perspective matters. today the high fliers in the nasdaq, the linkedin, teslas finally cracked, my favors celgene, regeneron and gilead. but very few can hold up even if they don't have that economic sensitivity. these high-fly selloffs don't end in a day or two. they tend to last three four days before they start bouncing back and usually bounce back with a vengeance. accept they've been big winners and big winners do sell off and then your call not mine whether you can handle the disturbance, or if you want to ring the
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register, i suspect they'll go back when the deal is done. again, perspective on things. as i like to do every time i get discouraged like today, i take a look at the "wall street journal" from october 4th of 2011. that's when the s&p 500 index fallen 19.4% from its high after the one-two punch of our first debt wrangling and the beginning of the session in europe. that was a huge selloff and traced to many of our similar political issues now, but as well as the lunacy on part of the european central bank which bumped interest rates twice in the face that turned out to be a gigantic slowdown if not a great recession worse than ours. that made a lot of sense given the economies around the world were fragile. we were coming back in tepid fashion. europe was sinking fast so was china. perspective. now we took a 7% hit to the s&p 500 of a fiscal cliff issue last year before that was resolved, many stocks fell more than that. that's appreciatively worse than what we've got right now. the economy is stronger here now than it was then and europe and china are in much better shape. let's not lose sight of the fact
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we aren't falling apart economically versus those down 19% and 7% declines when things were much more fragile. okay. that's the good news. and that news is very important. we do have a stronger economy now than during both of those crises, that's the point i'm making here. europe and china have improved since then. here's the bad news, same as the good news, the market's not falling part enough to get people's attentions. no the on main street, not on wall street, something, of course, the speaker of the house tried to do too after the close. neither the bond nor stock market is getting scaring people. is that a high-quality problem? i don't know. up to you. why is it, though, why hasn't it fallen more? well, first the president has often said things are going to fall apart in this country without a deal. said it in the debt ceiling in 2011, fiscal cliff 2012. we didn't fall apart because we got a deal.
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the speech today was on the one hand devastating of pretending what's going to happen. >> there's no business person out here who thinks this wouldn't be a big deal. not one. you go to anywhere from wall street to main street and you ask a ceo of a company or ask a small business person whether it'd be a big deal if the united states government isn't paying its bills on time. they'll tell you it's a big deal. it would hurt. >> yeah. it's kind of a total launch of nuclear weapons speech, the big deal theme. but on the other hand, we've heard variations of it before and never actually went nuclear. you know, i mean -- judging by the last two crisis, it was a mistake to sell into those very kind of speeches we heard today. people sold on the nuclear wrangling on 2011, 2012, couldn't get back in fast enough to profit from the bounceback. second, i think that until this weekend, we didn't know how intransigent both sides were. two things changed for certain
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this sunday. first, we got an article, a good article in the "new york times" outlining how well financed the republicans who don't want to deal are. we learned many of these people want to starve the beast and would be perfectly willing to unseat the speaker of the house that tried to deal with the president. i don't think john boehner has the votes to stay speaker if he gives into president obama because of these opponents. they made it a circuit, made it very clear there's nothing to negotiate because the debt ceiling is tnot lifted. the president seems unwilling to call this a constitutional crisis and therefore invoke the 14th amendment to force the government to pay its bills even though they may turn out to be the only constitutional way out of this jam. therefore, yesterday was the first day we realized there was no way out if everyone sticks to his guns. that's something that seemed to elude people until friday afternoon when many investors thought there would be a deal to open the government and raise the debt ceiling for the moment
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or at least for the time that takes the nukes off the table. in the last 48 hours, the conversation has changed and it has changed dramatically. we've gone to think the default was impossible. you heard that, 1 in 10 million shot, we should play those tapes again, right? to thinking it's something not only on the table but it will be dealt with if and when it occurs. that's right. we started talking about if and when it occurs today. it can occur. the president made it seem pretty clear that unless he gets his way without any negotiation, the bills won't be paid. how many times did he say today he wasn't budging. how did people say that was a forgiving speech? how many times did he say he was not willing to negotiate with a gun to his head? how many times did he say this time is different? until the speech of the press conference, we'd been tracing out a scenario where the deadline was considered fungible. there's enough money in the till. same with a lot of the other government bills. in fact, until the president
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spoke today, we felt there was a plan. a plan to avoid default no matter what. i thought there might be a plan there, like some secret plan. i thought the president was hard to follow on this issue in his press conference. everyone acts like they could follow him perfectly, i couldn't. i live and breathe the stuff. i think he said there are things that can be done to mitigate these issues but they're all bad. the least bad of all bad options kind of like argo. he also said there's nothing to be done in terms of prioritizing the debt that is satisfying to him. the uz that mean he won't authorize anything to be paid? unclear. now, we're in new mode after today. now we're in a mode where the stock market or bond market has to experience real pain much more than we saw so far so negotiations can start in earnest. it seems we'll have to experience job offers. we don't have federal data because of the lame brain shutdown before anything can be done. yesterday we got worried there was no deal over the weekend, today we got scared we were going to have no deal to pay the debt and no way to get out of the box. what is to happen? i'm going to be clear again.
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i do not think there'll be a default. that would be catastrophic because the world runs off our treasuries. by the way, this is not a $1 trillion problem. this is tens of trillions of dollars at risk of being thrown off kilter, which is why i don't think it'll happen, it's too big, it's too big to think it can happen. it's much bigger than lehman. i don't know, people say it's ten times bigger than lehman. give me a break, it's hundred times bigger. i've been adamant a long time saying we will come down a lot more going into october 17th, they were supposed to run out of money and unique cash on hand for your stock portfolio as we have in my charitable trust. we did not put any money to work here. i've been saying once we got past halloween, we're in stress mode where real businesses get hurt. today we heard the president say that we could have a very deep recession. his quote, if we don't get a deal and the deal has to be done by october 17th. he moved up the goal post back to where it was and made it clear that business could be crushed by a default if we go back over those goal posts. here's my bottom line. president created some urgency
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today. without the market coming down much more from where it is, that urgency doesn't yet have the gravitas needed to get something done. to me, that means more pain ahead. fortunately, the economy's stronger than the last political crises and the one before that. still, expect more declines and more trouble before we get a deal that satisfies no one but does put the nukes gloriously back in the silos where they belong. hey, why don't we speak to igor in new york, hey. >> caller: hey, this is igor from staten island, new york. boo-yah for you. >> that's a good one. >> caller: i'm calling about angi. last week, they reported they cut their fees from $40 to $10. since then, the stock is up over 35%. is this stock oversold here? or is the business model simply now viable? >> i have to tell you, i read the stories and felt awful about the stock. i said to myself, we have to avoid this one. really the business model in correction is the correct call. and everyone on staten island should stay away from angie's as
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well as everybody else. john in california, please, john? >> caller: jim, thank you so much for your show. >> i've been to the red top, it's darn good ice cream. am i right? is that good soft serve or what? >> caller: you've been there. >> you bet. >> caller: i want to ask you about qualcomm. had it for a while. a while back i saw on your show you liked texas instruments better. but i noticed they had a pullback or a downgrade. something to worry about? >> i didn't know -- i know they said business is going to go downhill two years from now. if it's the kind of note that makes me say, you know what, i don't need that kind of risk. i would stay away from qualcomm. it's no angie's list, it's a good company with a lot of money, but that note was very -- disconcerting. okay. brace yourselves, more pain on the way but take comfort in the fact things were better than they were in the last two crises because the economy was better. the economy was real bad in this one. "mad money" will be right back. >> coming up --
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supersize shale? everything's bigger in texas including what could be the second largest oil discovery in the world. tonight, cramer's got an exclusive with the company at the center of this new source of american energy. the ceo of pioneer natural resources is next. and later, diving into default? >> this is the credit worthiness of the united states we're talking about. >> while d.c. battles it out and puts the entire global economy at risk, cramer's flipping the script. don't miss his list of companies that could capitalize on the chaos in the capital. plus, heart of glass? looking for a way to play what's next in tech? cramer's got his eyes locked on the company powering google glass. it's already displayed a stunning performance, quadrupling this year alone. but could technical signals point to more? find out on "off the charts" all coming up on "mad money."
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don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer #madtweets. send jim an e-mail to madmoney@cnbc.com. or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. evto earn degrees in mathan stand science.ut but more than half leave their programs. so we're missing out on 450,000 math and science graduates annually. but if we can help students prepare for these subjects
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by 62%, which makes days with grandpa jack 100% more possible. join us at kp.org and thrive. while washington seems dead set on turning the united states into a mickey mouse country, there's still plenty of areas where we are nurl one and let's not forget it. there's one particular area where we're becoming number one. about to pass russia in the world's largest producer of oil and gas. rip your hearts out, saudi arabia. we've been highlighting all of america's sexiest shale plays. and what's now looking like maybe the biggest of all, the permian basin down in texas and new mexico. you must talk about pioneer natural resources.
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pxd. they're the largest producer in the state of texas. but i've got to tell you, maybe the new major in this country. eagle ford shale, barnette shale as well as the basin across texas, oklahoma and kansas. and the gas fields in the rockies. company is sitting on vast quantities of oil, particularly in the oil field area of the permean, entering 225,000 barrels of oil a day. it was considered the largest uneconomic oil play on earth. but since then, new drilling techniques based on hydraulic fracturing. up 80% since the year began, 15.6% growth rate. i think it's worth buying on any pullback because the company's growing production like crazy up 17% in the most recent quarter. let's check in with scott chatfield chairman and ceo, maybe the greatest oil man in this country right now. find out more about how his company's headed.
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welcome to "mad money." >> thank you. >> now, the reason i say this, there's two charts i wanted to show people because they blew me away. the first is, you've got largest u.s. oil fields. and in it, you've got sprayberry. this looks much bigger. and the second, for a little perspective, a saudi arabia field and then ours? >> yes. >> how can this be? >> it's all about a change in technology. we've taken a field, we've been drilling vertical wells for the last 30 years, 40 years. and now we're finding out there's about eight key zones. it's like having eight eagle ford or eight bakkens, there's 3,500 feet of shale. we're going into those zones, making wells that make about 3,500 barrels a day where they used to make 100 a day. there's like eight eagle fords
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on top of each other or eight bakkens on top of each other. that's what got everybody excited. >> all right, scott. no one's talking about this other than you guys. how's that possible? i mean -- when it was discovered, everyone knew about it. when the bakkens got going, no one believed the bakken could be as big, and then we were told about the eagle ford being big. how can it be dwarfed by this field no one's talking about? >> we're talking about it. >> well, other than you. >> people like concho are talking about it. there's a lot of apache is starting to talk about it. focusing their attention to it. but we've been the most dominant player in the midland basin and this spraberry wolf camp for years. back in the '80s and '90s, most of of the 900,000 acres is held
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by production. and so we're the ones that have been doing most of the drilling. we'll be doing most of the drilling. we're ramping up to about 50 horizontal rigs over the next five years. we have the largest data base in the midland basin. over 70,000 well logs, over 12,000 feet of core. so that's why we have the data base so we sort of have controlled what's been discussed about this field for the last 30 years. >> okay. now, when i listen to simmerx last night, are you a refining company or an oil company? >> we're an oil company, but we have some of the best geoscientists and engineers you can ever find. our company moved to dallas back in 19 the 1997, we merged with mesa and got some of the top geoscientists in the industry to go to work for us. they're doing the work. >> all right. now, there are other companies trying to get in. the chinese are trying to get
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in. you sold just a sliver of your business to china for a huge amount of money, right? >> yes, we sold roughly 40% position in 200,000 acres, so 80,000 acres, so probably a little bit less than 10% for about $21,000 per acre. it's a great partnership. we're in the process, up to seven rigs, we'll be ramping up to 10, 11 rigs next year, horizonta horizontals, over 10,000 barrels a day. we're ramping up to 350,000 barrels a day over the next 20 years. >> now, the -- curve here shows that you're not even where -- -- a lot of times we see them go down quickly. yours is going like this. you think 2013's going to being a big year. >> yeah, we expect to grow per share 15% to 20% over the next several years. when you stop modelling these type curves, payouts less than a year, there's 17,000 barrels a
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day. they're -- when you start focusing your attention on the best wells, we should grow at that rate. >> should you sell the properties and fund a gigantic amount of drilling right now in -- in spraberry? >> in fact, we sort of did that. in 2006, we made a strategic decision. we got out of all international assets. >> right. >> out of the gulf of mexico assets, refocused all the attention, the engineers and the geologists on primarily the eagle ford and primarily west texas in the midland basin. >> and you have enough money to develop spraberry? >> yes, we do. as long as crude prices stay relatively in the $90 range, we have plenty of cash flow over the next several years. >> what a story. i mean, i think it's good to have a good story on a couple bad days. yours is -- you're the next big major. i can't believe it. you're the next big major. >> thanks, jim. >> okay. absolutely. scott sheffield, chairman and
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ceo of pioneer natural resources. go through his presentation, largest u.s. oil fields and you'll feel like i am. you will be blown away. stay with cramer. coming up -- diving into default? >> this is the credit worthiness of the united states we're talking about. >> while d.c. battles it out and puts the entire global economy at risk, cramer's flipping the script. don't miss his list of companies that could capitalize on the chaos in the capital. and later -- looking for a way to play what's next in tech? cramer's got his eyes locked on the company powering google glass. it's already displayed a stunning performance quadrupling this year alone. but could technical signals point to more? find out on "off the charts." all coming up on "mad money."
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boo-yah! >> for some companies, a default or at least the whiff of a default is a terrible thing to waste. these are companies that are itching to get their hands on their own stocks. they might actually welcome the continued selloff as they know their businesses won't be that badly impacted even by the prospect of an actual couple day default. the reason. they think they've seen this movie before when lehman defaulted and they believe they'll get through it. could they be right? they can make themselves right.
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who are these potential buyers? buyers of their own shares? which companies want to use the pain in the stock market for their own gain? before i give you these names, let's make sure we understand each other. a default and all out default would be cataclysmic. i think the president won't risk being the only president in history to ever default actually not pay the bills of this nation you could say, wait a second, we did that in the 1700s. when history looks back, they won't remember the speaker of the house, they'll remember the president. that's a weighty thing to be tabbed with. as long as the interest in the debt keeps being paid in some form or another, even if it means other services really are shut down or payouts are curtailed, i reiterate, there will not be a default. the economy will be crushed. you can't have the $60 billion a day the government pays out suddenly disappear think the economy won't collapse. that's a gigantic swath of
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checks no longer in the mail. unless we get a deal, they won't be in the mail come november 1st, which i think is the real drop date despite what the president said about it being october 17th. so much gets sent out at the beginning of the month, it is unconceivable there'll be enough in the till to cover all those bills. at that point, the economic game will be too intense. the pain will be too intense for t and the president will find some way to negotiate in a nonnegotiating way. we have to figure the president and gop finally budge. the idea of a default as likely as a meteor or whatever hyperbole we keep hearing, that flies in the face of the bitterness. in fact, the amazing thing about this moment is that until yesterday, so few people seemed to be genuinely worried about a default. that's probably a mistake after listening to today's press conference when the president, he scared us. he made you understand we could both have a default and serious recession.
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i think the odds of a default min mouse. but they aren't as long as they were last friday. now, many companies will claim they want to take a longer term view and sit and wait because of this crisis. but some companies generally like to take a long-term view. an actual long-term view. which is why they take action into the teeth of whatever occurs. i say whatever because we really don't know what will happen. they think the long-term must be addressed now. who has that luxury? who can take action, who's confident enough in their businesses to actually spend money and buy stocks? buy their own stocks? there are a handful of companies that use it to buy back their stocks at phenomenal prices. the executives have faith in their companies and business plan. first up, gamestop. when everyone including yours truly was scared about the
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gaming business, what did the world's largest do? pay down its debt. just when everyone was fretting, gamestop took a look at the world and declared it good. the hardware cycle is about to kick in. he realized he could take share from whoever was left. he understood games were amazing. he bought back a ton of stock at much lower prices. now that the new machines are in the stores and the latest grand theft auto is proving to be the greatest moneymaker of all times. do you think he's going to sit on his hands? i think he's going to buy with both hands especially since he thinks 2014 is going to be better than 2013 and 2015 even better than that. why not buy in stock? don't forget, gamestop already has a substantial european business and says that's starting to improve. it's 1 of 24 companies in the s&p 500 with no debt whatsoever. although it's the only one i would not be worried about when it comes to debt-related recession because these games
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seem to have a fascination by themselves. 31 loyal gamers are not walking away from gamestop just when the getting's good for their gaming business. next up, how about those incredible media stocks. take a look at how much viacom bought back. 17 million before the start of the recession. now viacom has 491 million shares. david faber and i marvel over this -- every time we mention the media stock, we cannot believe how much stock is bought in here. the company company just prints money and likes to buy on bad days. i bet some will be bidding for every share that comes in during the impending crisis. will cvs be any different? i see cbs dropping from 771 million in 2006 to 624 million now. and that's going to keep shrinking if the debt-related calamity occurs. there must be something in the water at these media companies. time warner, a company willing to buy everything that moves and
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america online, which in two year has taken from $106 million down to $81 million. the ceos of the relative companies as they have faith in the cash generation and deploying that capital in a very smart way. how about this windham worldwide? that's under steve holmes, this company seems addicted to doing the right thing for shareholders. four years ago, there were 182 million shares, now there are 136 million. every time we've had steve on the show, he's said the same thing. he's giving the money his company doesn't need to grow right back to the shareholders. and that's why this one is a long-term winner because of the capital allocation. these are all stories about capital allegation. finally there's a company that hasn't done that well lately because the economy's been a little too strong for its business. markets convinced a too strong economy makes it less likely we'll fix our cars ourselves and more likely to buy a new one. autozone doesn't care. keeps taking back that cash and
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buying back stock. in six years the company has bought back half of the shares outstanding. don't you think it'll have a field day as the food fight in washington continues? i think it will especially as the economy slows, even better for autozone. yesterday i talked about dividends a way to protect yourself and reiterate those are terrific safety nets. i think when we look at the calendar, where we are in the year and how little time is left in 2013, it is reasonable to believe that the large institutional investors are well aware of the patterns i'm talking about and they want to take action. here's the bottom line. those huge buyers will be fighting with gamestop, cbs, aol and autozone for every share that comes in the next four weeks. which is why these are natural places to be bidding on cataclysmic days like today. if the companies weren't worried and bought all through the great recession, which was real and lasting, don't you think they'll be buying through the debt ceiling debacle which is phony and not lasting? you bet they will. don't jump the gun, though. after today's speech and the press conference, it appears there's more pain lies ahead.
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i don't expect this time to be any different. pick your favorite and pick at it on the way down by the time the debt deal is at last solved or we are down 10% to 15% from the 2013 highs of these incredible stocks. >> boo-yah, jim. >> boo-yah. >> i always thought a company like groupon would be able to use red box's network of kiosks to advertise and sell deals to millions of value-seeking customers. what do you think will happen with outer wall? >> well, outerwall, i'm not as bullish. it's funny, i thought you were going to say groupon, i am bullish on groupon because of the unbelievable management team. it's an inexpensive stock. i don't know what the exact catalyst will be there. but i like the groupon on any weakness because that's a turn around story that is definitely working. let's go to aaron in california. aaron?
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>> caller: hi, jim, this is aaron from california. >> how are you? >> caller: good, how are you? >> good, thank you. >> caller: what do you think of carl icahn disclosing his stake yesterday? >> talisman is a good company. the stock came back down because talisman came down -- it's up on a spike. talisman is shifting rally to oil. it's undervalued because people think they got the nat gas thing wrong. i think it's a good bet. okay. on tough days, you can bet on the opportunistic buyers. who are they? the managements of gamestop, viacom, cbs, aol, wyndham and the zone. stay with cramer. tomorrow, kick off the trading day with "squawk on the street."
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oh, boy, it is time for the "lightning round" on cramer's "mad money." rapid-fire calls, i tell you whether to buy or sell. play until this sound and then the "lightning round" is over. are you ready? time for the "lightning round" on cramer's "mad money." kevin in washington, kevin? >> caller: hey there, big boo-yah from washington. >> good to have you. >> caller: so i bought stock from aig a few years back for $20 a share, now they're $50 a share. what should i do? >> i think robert b-- you shoul stick with aig. >> caller: boo-yah. >> boo-yah to you. >> caller: what do you think about seaworld? >> no. seaworld missed, i have to tell you that was quite shocking. let's go to jack in texas. jack? >> caller: hey, jim. >> yo, yo.
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>> caller: permian basin boo-yah. >> i'm going to come back with a spraberry permian boo-yah. >> caller: a few weeks ago, ceo rick smith of taser was on the show. after last week's price reduction on their products, what effect will this have on the earnings report at the end of the month? >> i think this is a bigger company developing a larger, a larger cloud product i think is going to be able to make it. better than we think. how about barbara? >> caller: hi, jim, greetings from the beach. love your show. >> what's up? >> caller: love your show. my question is about at&t. yesterday, you mentioned stocks that paid dividends. what do you think about at&t -- >> yeah, at&t, i did the piece and cut out at&t, i think the verizon deal is better than people realize. but at&t has a good yield. i think at this these prices,
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i've got to tell you, let's say you get that thing at 32, 31 with a 5.76% yield, that's for me. let's go to mike in new jersey. mike? >> caller: hey, jim, how are you doing? >> all right. how about you? >> caller: awesome, great. i'm calling about globe specialty metals. gsm. >> hitting a high. this is alloy metals. we had the company on when the stock was much lower. i've got to hand it to them, i think the stock is working. trey in texas, trey? >> caller: howdy, jim, this is trey down in south texas. >> nice. close enough to oil. what's up? >> caller: got a real popular store down here tractor supply. i was checking on tractor supply company stock. >> tractor supply is a high multiple stock that's going to come in as all the high multiple stocks whether it be netflix, amazon, or tesla. it's a stock that's going to bounce back fastest. i would buy with deep in the money calls, scaling in and scale in ultimately down 10% to
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15% from the high and that's when you should finish the position. phillip in massachusetts, phillip? >> caller: boo-yah. how are you doing, master james? >> real good, partner. how about you? >> caller: all right despite the fact that the patriots lost this week and red sox and i guess i'm hanging in there. my question is what do you think of onconova therapeutics? >> i'm not sure. i need to do more work. i've got to take one more call. let's go to tater in florida. tater? go ahead. >> caller: go gators. jim, as an alumni, i've got plenty in my portfolio, i'm looking for a little offense. what do you think about dry ships? >> do you know what dryships is? a cross between florida state and clemson! you have got a high-flying
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offense! i'm going to spot you 62 points, i think you've got a winner. and that, ladies and gentlemen, is the conclusion of the "lightning round." the "lightning round" is sponsored by td ameritrade. coming up -- heart of glass? looking for a way to play what's next in tech? cramer's got his eyes locked on the power companying google glass. it's already displayed a stunning performance. quadrupling this year alone. but could technical signals point to more? find out on "off the charts." ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪
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♪ an environment like this one where the washington induced catastrophe seems to linger permanently on the horizon, it's more important to find yourself interested in the process of investing. once you lose interest, you stop paying attention. when you stop paying attention, you maybe don't check your statements. as soon as that happens, you're asking to get wiped out all over again. that's why i'm trying to convince you to add something a little extra to your portfolio, a little to buy something exciting, maybe it's high risk, high reward, a stock that will
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grab and hold your interest even during the dark period like this one clm! tonight we're going off the charts with a speculative stock. and i'm getting called about this one during the "lightning round." it's called himax technologies hmx. they design the display drivers for everything from flat screen tvs, computer monitors, laptops, tablets and smartphone displays. it's been blessed by the audience, bob lang, brilliant technician as well as being my colleague at the street.com and a third blessing, the fundamental side from brian ashtenberg who owns as part of a news letter where they only consider stocks with the hottest metrics. okay. that's all the fundamentals and chart work, but let's focus on this. this stock has moved up. it's more than tripled since the beginning of the year. rallying 320% from $2.40 just
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above $10. the truth is, designing these lcd chips is basically a commodity business which has always worried me about himax. not a great business. lately, though, moving into other areas that could be more lucrative. designing tv chip sets, image sensors, touch panel controllers and most important, the chips that power liquid crystal on silicon displays like those used in google class. google's computerized smart glasses that are launching next year, all of these new businesses only account for 15%. company believes, though, the figure will hit 30% next year. google bought a 30% stake on crystal and silicon subsidiary. they have an option to buy another 8.5% of this part of the business. the stock's been up ever since. there's a real story behind himax, albeit a speculative one.
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i just don't think it's come down enough. but the charts, according to technical expert lang say differently. he says you're looking at the anatomy of a small cap momentum stock here. first of all, lang points out ha himax has rallied over the past month and a half. done so on tremendous volume, much higher than average volume. you got that? which tells us that big institutional investors are buying when the big boys get involved in a little stock like this one, they can send it soaring higher because the positions need to be huge in order to be meaningful to their funds. when himax pulled back below nine, lang notes the stock was up in a hurry in a matter of days making new highs. checking out the convergence divergence used to detect changes before, before they happened. and with himax at the beginning of september right about when this rally took off, we got a classic bullish crossover in the macd. basically the technical equivalent of a green light
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telling you to buy. and lang says the macd remains in bullish territory. then there's the williams r, this is that second one. that's an oscillator, a tool developed by commodities trader named larry williams to detect if it's overbought or oversold. according to lang it's overbought since the beginning of september. what does that mean? what is that? doesn't that mean it's considered it's due for a pullback? if it stays overbought, especially a month. he says it's a sign of unrelenting momentum. wow. all right. now let's take a look at the weekly chart. when you see this stock has shown incredible strength ever since it broke out above $2. will you look at that thing? you get lost in the trees of washington and realize there's opportunities like this out there. we've seen a massive volume increasing on the year. see what's gone on. lang notes when himax has pulled back during this period it's consistently made for a terrific buying opportunity. it's worth pointing out that himax got hit hard today falling 53 cents or 5%.
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lang thinks you can see another fantastic chance to buy this one, especially if it goes lower, the best trends out there rally and give you a chance to get onboard and lang says they rarely do this. himax is one of the best but you seem to be getting your chance here. you can get a better one if it goes lower. one last point, i wouldn't mention a stock as speculative as himax on the charts if it didn't give you downside preservation. as it happens, himax is sitting on $1 per share in cash. more important, pays a dividend, decent one for a high-tech stock, yields 2.5%. if himax gets slammed, you've got that yield to protect you. in the suddenly terrible market like this, you need something to get excited about. and according to the newsletter, bob lang, brian ashtenberg and then a model that says it's good, himax is not just hot, it's smoking hot, i want yo uh to be careful with this one.
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do not buy it in strength. if it rallies tomorrow, take a pass. wait for it to come back down. get a better entry point. give it some time and i'm sure you'll get one considering the damage being done to the market and the mess in washington. stay with cramer. mad about "mad money"? immerse yourself into cramer's world while you watch the show with zeebox. on your phone, tablet or on the web, get sneak peeks, go behind the scenes and join the conversation. download the free app today for the ultimate cramerican adventure. [ man ] on december 17, 1903,
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the wright brothers became the first in flight. [ goodall ] i think the most amazing thing is how like us these chimpanzees are. [ laughing ] [ woman ] can you hear me? and you hear your voice? oh, it's exciting! [ man ] touchdown confirmed. we're safe on mars. [ cheers and applause ] ♪ hi. [ baby fussing ] ♪
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what's your policy? one of the quirky side effects of the ridiculous shutdown/debt ceiling fiasco is only a total stooge of a company would give an outlook. how can you not waffle your estimates with this mess in washington? almost no company should feel safe letting expectations get ahead of themselves right now. think about a retailer, if people are worried about social security checks, do you think they'll go out and spend? how do you not worry about social security given so many were worried about it in 2011. this seems worse, natural, social security payments are a mainstay for a huge number of people. how about tech? almost every company has dealings with the federal government and tech. you want to be on hold with them and tell people all is well? how much money is lent out every
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day on treasuries that would suddenly trigger a margin call? who knows what mortgage rates will be? what's prudent? you can't just ride treasuries through this if you think about it because of how much interest is on the line. you're trying to match interest with payments to depositors. report soon should be palpable and the number of cuts so obvious if this goes on the point where the default is a recent possibility, the whole group will be difficult to own. now, i know the republicans think that defaulting would be a wake-up call. there was an amazing article in the "washington post" about a congressman named ted yoho who seems to be on a mission to get us to default to teach everyone a lesson, whoever anyone is. now, he is a person whom every business person in the country should listen to but also fear. because the lesson he teaches is going to be borne by private companies not the federal government. this man has tremendous conviction, no one around him should fault him for that. he was elected with this view. be if i were in the business of
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his district, maybe working at the local walmart or target or bank, i'd be working tirelessly to defeat him because he's voting to slow down private business, voting to cut your numbers. they can take numbers down. now, those who don't care about stocks, at least short-term, those who don't care about savings or retirement accounts -- and i'm not picking on yoho, it happens to be his comments are more stark than others. trying to preserve the long-term value of these assets. that's not how the market works. the pro default caucus gets their way, they will crush current earnings, current savings, scare the wits out of people, lower confidence, increase layoffs all in the name of long-term solvency. they would raise the price of interest on treasuries dramatically in order to be able to lower the price of interest? maybe that's a good tradeoff, maybe default is the way to sober up the nation. maybe yoho stands if it prevails will do the same. does anyone think that lehman was the best way to straighten out the banking system? the layoffs, the loss?
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was that a way to sober up bankers and regulators? otherwise, there's better ways to go. this is going to be a long and awful earnings season. stay with cramer. customer erin swenson ordered shoes from us online but they didn't fit. customer's not happy, i'm not happy. sales go down, i'm not happy. merch comes back, i'm not happy. use ups. they make returns easy. unhappy customer becomes happy customer. then, repeat customer. easy returns, i'm happy. repeat customers, i'm happy. sales go up, i'm happy. i ordered another pair. i'm happy. (both) i'm happy. i'm happy. happy. happy. happy. happy. happy happy. i love logistics.
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tough day. i'd like to say there's always a bull market . good evening, everyone. i'm larry kudlow. this is "the kudlow report." we're live at 7:00 p.m. eastern and 4:00 western. tomorrow president obama will nominate dr. janet yellen as the next chair of the federal reserve. let's go to steve gleason. this is not a shocking surprise, is it? >> no. the surprise is it took so long

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